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New President of Peru vows to fight poverty and social exclusion

The new president of Peru, Ollanta Humala, has been sworn into office, promising to eliminate poverty and social exclusion in his country.

Mr Humala takes over a country in reasonably good shape economically. The country has enjoyed more than eight years of economic growth at rates of 7-8 per cent. And though there was a sharp dip during the global recession in 2009, growth bounced back to 8 per cent in 2010. But though Peru’s economic expansion has allowed an impressive decrease of over 19 per cent in the national poverty rate over the last decade, huge inequalities still exist.

Nearly 8 per cent of Peru’s population live on less than one dollar a day and 5 per cent of children under the age of 5 years are underweight (according to the World Health Organisation), with nearly a third of children suffering from stunted growth.  In 2009, 21 children were likely to die under the age of five for every 1,000 live births (compared to a rate of 5 in Great Britain).

In his first address to the nation, the new president said that free-market economic and trade policies would remain. However, while vowing to protect Peru’s economic performance, the new president also said greater emphasis would be placed on alleviating poverty. As one measure to help poor families, Mr Humala aims to raise the minimum wage. During his campaign, he also made election promises to provide free day-care and raise the salaries of public sector workers. The state pension for over sixty-fives is also likely to be increased.

Some economic experts say that Mr Humala will be in charge of a government which can afford to expand its public welfare spending. Compared to Brazil, where the government absorbs 41 per cent of gross domestic product (GDP) earnings, currently Peru’s government only takes 17 per cent of GDP. Therefore with care in economic management and continued efforts to encourage foreign investment and tackle corruption, Mr Humala could for example afford to expand spending on areas such as Peru’s cash transfer programme for poor families, a scheme similar to Brazil’s ‘Bolsa Familia’.

When asked in a recent interview by the BBC whether he hoped to follow Brazil’s example of combining market-friendly policies with social programmes to help the poor, Mr Humala didn’t want to be pinned to any specific ideology. He told the BBC that there was a need to “solve the problems of inequality, illiteracy and malnutrition in Latin America”, but added “it doesn’t matter what colour the cat, as long as it catches the mice”. The poorest of Peru’s people will be hoping that Mr Humala turns out to be skilled at catching the targets he sets for himself.

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